Question: If the correlation between the underlying asset being hedged and the futures contract is -1, which of the following statements is true? (a) Changes in

If the correlation between the underlying asset being hedged and the futures contract is -1, which of the following statements is true?

(a) Changes in value of the underlying asset and the futures contract have perfect positive correlation.

(b) Changes in value of the underlying asset and the futures contract have perfect negative correlation.

(c) There will be a dollar for dollar change in the value of the underlying asset and the futures contract, in the opposite direction.

(d) Both b and c.

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